• Home
• About
• Contact

Subscribe

Top Categories:
• BOT
• CEN 278
• Construction
• DDA
• Investment and Finance

IVRCL Infra bullish on BOT road projects

IVRCL Infrastructure and Projects Ltd said it has received a Rs 1,550 crore BOT (Built Operate Transfer) road project in Madhya Pradesh from the National Highways Authority of India (NHAI). The concession will be for 25 years and the project will be completed in 30 months.

“The 155-km long road project will be executed by a special purpose vehicle owned by IVR Prime. The road construction will be taken up by IVRCL Infra,” said Mr E. Sudhir Reddy, the chairman of IVRCL Group.

“With this, IVR Prime has BOT projects — confirmed and lowest bidder — worth Rs 10,000 crore,” he said adding that the company expects to win six BOT projects by this year end.

The project, which is a part of National Highway 59, involves design, engineering, construction, development, finance, operation and maintenance of the road that runs between Indore and Ahmedabad.

Mr Reddy said that the debt-equity of 5:1 would be used to fund the project. “The equity component will be raised through internal accruals and raising debt will not be difficult for us,” Mr Reddy said.

Following the road transport and highways minister, Mr Kamal Nath’s target to build 20 km road every day by April 2010, the NHAI has put the process of awarding contracts on the fast track. “We are currently doing 9 km a day and would be in a position to scale up to 20 km a day by April-May 2010,” Mr Nath had said recently.

Recently, the government had approved road projects worth Rs 6,152 crore in five states for upgrading nearly 562 km of four-lane highways into six lanes.

Mr Nath had also coined the idea of issuing infrastructure bonds to raise money from non-resident Indians on the lines of the Resurgent India Bonds issued in 1998 and the India Millennium Bonds issued in 2000.

Backward-bending policy to take toll

The B K Chaturvedi committee has suggested ways for expeditious financing and implementation of the National Highways Development Project (NHDP). It has rectified problematic rules concerning the exit policy, bid security, security to lenders, request for qualifications (RfQ) and request for proposal (RfP). These belated measures will surely make highway projects more attractive for investors.

However, some other recommendations bear unmistakable signs of fear psychosis, perhaps caused by the reduced private investment in highways during 2008-09. The decline was largely due to two reasons: the detrimental and mid-course changes made in RfQ and RfP rules, and the economic downturn. But in a typical panic-driven response, the committee has confused symptoms with the causes. Thus, it has introduced some questionable changes in the model concession agreement (MCA) for tolled projects. Conversely, several crucial issues have been ignored.

To put arguments in perspective, recall the pre-August 2008 scenario: 9%-plus growth rate, upbeat credit and financial markets, and bullish investors scrambling for projects to invest in. During 2006-07, more than 60 highway projects attracted private investment. In fact, there was a shortage of well-structured projects on offer.

The extant rules regarding the viability gap funding (VGF) and termination of contract posed no threat to the attractiveness of highway projects. Yet, the committee has targeted these rules to implement investors’ wishlist. Under a BOT-toll contract, an investor is granted the right to charge toll from users.

There are two main justifications for this concession: investors provide upfront funding for projects, alleviating the taxpayers’ burden, and bear the construction, maintenance and commercial risks. VGF grant is provided to make a socially-desirable but unprofitable project attractive for an investor. The underlying objective is not, and should not be, to add to the upfront financing — that is for the private sector to do. Limited funds are available for VGF. The MCA rules allow VGF up to 40% of the project cost; 20% during construction phase and the rest during maintenance phase.

In contrast, the committee has offered the entire grant during construction phase itself, and has reduced
it to a mere cost-sharing device. Further, compared to what would have been possible under the earlier rules, now the grant requirement of fewer projects will be met with. So, at least in the short run, fewer grant-dependent projects will take off.

Besides, an investor can borrow 20% of project cost at concessional rates from the IIFCL, a public sector company. Indeed, excluding the profit margins, an investor can meet up to 70% of cost just using grants and other funds raised by public sector entities. Simply put, what was to be the investor’s responsibility has been passed on to the taxpayer, undermining the rationale of VGF as well as toll contracts. Moreover, an investor is reimbursed 90% of due debt if the contract gets terminated. So, the new rules are likely to create moral hazards during construction phase and later.

Under MCA rules, if actual traffic turns out to be less (greater) than predictions, the concession period is increased (reduced) proportionately. If traffic increases beyond the designed capacity, to avoid congestion, the concessionaire is required to widen the road at his cost. These rules imply that road users get satisfactory service, and the investor and the taxpayer share the unanticipated losses (gains) arising from traffic-risk. In contrast, under the new rules, if the government asks for capacity expansion on account of high traffic, it will have to compensate the investor. Moreover, the contract period cannot be reduced. So, the event of traffic exceeding the designed capacity has become lucrative for the investor. It would ensure them unexpectedly high profit.

Source: economictimes

Hazaribagh road clears Cabinet bump

Ranchi, July 31: The Union Cabinet has finally cleared the project to widen the Ranchi-Hazaribagh stretch of NH-33, considered the lifeline of the state, making it the first project in the region — including Bihar — to be executed under build, operate and transfer (BOT).

The Cabinet sanctioned Rs 688 crore yesterday for four-laning 71km of the highway which means that a consortium of IL&FS Transportation Networks Limited (ITNL) and Punj Lloyd would now be awarded a contract by the National Highway Authority of India (NHAI).

According to the terms of the BOT-annuity plan, the project will have to be completed in two and-a-half-years. The consortium would be paid Rs 64.08 crore every six months for the next 15-and-a- half years.

In all, the government would be paying the consortium approximately Rs 1,900 crore, the funds for which would be sanctioned in future. The consortium will, however, be responsible for maintaining the road for 18 years from the date of awarding of the contract.

“Now NHAI will issue a letter of intent following which a contract agreement will be signed with the consortium. This will be the first project in Jharkhand and Bihar to be executed under BOT-annuity basis,” Lt Col Chandan Vatsa, the NHAI general manager (BOT), told The Telegraph from Delhi, sounding relieved that the project had crossed its final hurdle.

Four-laning of the Ranchi-Hazaribagh stretch was in phase III of National Highway Development Programme’s (NHDP) which was cleared by the Centre in 2005. But it was held up as the past three attempts to invite bids did not yield results.

Vatsa, however, warned that the state, now under president’s rule, had a lot more to do so that land acquisition, forest clearances and other permissions were speeded up.

“Only about 48 per cent land required for widening the road is under NHAI’s possession. As per the Model Concession Agreement approved by government of India, at least 80 per cent possession of land is mandatory before a contract cab be awarded. So now the state administration must pull up its socks,” the NHAI official said.

NHAI has also provided for a 4.2km bypass in the Kujju area of the highway to avoid the fire zone that has already made commuting in the stretch dangerous. The by-pass, that would run on a new alignment, has been included in the proposed four-laning project.

The total length of the Ranchi-Hazaribagh stretch of NH33, including the bypass, would work out to be 71.16km.

“The new proposed alignment will avoid the existing fire zone in and around Kujju. It could well be the safest zone. But once the project starts we will need to conduct soil, bore hole and other geological tests to assess the exact magnitude of the underground fire,” Vatsa added.

M.K. Pandey, the manager (technical) of NHAI, said they have apprised Delhi about the situation at Kujju. “After conducting the geological tests, the authorities may even decide to alter the alignment of the Kujju bypass once work starts, ” he said.

Source:www.telegraphindia.com

NH-6 extention plan till Hazira port to be put on fast track

With the Congress-led UPA government taking over at the Centre, widening and extending of the 132-km stretch of road project between

Gujarat-Maharashtra border and Hazira port on 2,000-km long National Highway-6 (NH-6) is likely to be put on the fast track by National Highways Authority of India (NHAI).

The project was caught in a logjam for quite some time as a few industries were unwilling to part with the required tract of land.

The Cabinet Committee on Economic Affairs (CCEA) of UPA government had approved the project costing Rs 1,661 crore on February 5 this year. With the bidding process for the project already underway, the new government is likely to clear roadblocks soon, said sources in NHAI.

The process began in May 2008 with NHAI inviting tenders for short listing suitable agencies to implement the project. But, nothing concrete could be achieved, largely due to some public sector undertakings (PSUs) lobbying hard for an alternative route, as widening of existing road requires strip of land under their jurisdiction.

The plan to extend NH-6 was stuck after National Thermal Power Corporation (NTPC) and Krishak Bharati Co-operative Ltd (KRIBHCO) made several representations to NHAI in May last year stating that they were not in a position to spare additional strips of land near their facilities.

According to a letter in April last year by NHAI to all industries in Hazira, an additional land strip of 36 m to 42 m along the existing road was required on the stretch of 8.7 km from KRIBHCO to NTPC and on 5.7 km near Essar Group in Hazira area.

An alternative suggestion was made by KRIBHCO to avoid widening the existing road in Hazira and NHAI. “But a truncated stretch was not possible and hence not a substitute to the proposed highway up to Hazira port,” a senior official in NHAI told TOI.

NHAI, a central government agency, is keen on executing this project.
Source: timesofindia.indiatimes.com

Bid to widen highway begins

Ranchi, Aug. 1: National Highways Authority of India (NHAI) has set the ball rolling for the four-laning of Hazaribagh-Ranchi stretch of NH-33, considered to be the lifeline of Jharkhand.

NHAI, which functions under the Union ministry of road transport and highways, has invited a global expression of interest (called request for qualification in technical parlance) from construction majors. The last date to respond is August 29.

“It would be a 75km stretch of NH-33 costing around Rs 600 crore. The tenders would be on build, operate, transfer (BOT) annuity basis,” said H.C. Arora, the chief general manager of NHAI, who looks after projects in Uttar Pradesh, Uttarakhand, Bengal, Bihar, Jharkhand and Delhi.

This would be the third time that NHAI has invited tenders for the same stretch.

Earlier, two efforts to finalise the project through BOT-toll basis proved futile with no parties responding to pre-qualification bids apparently due to Naxalism and law and order problems in the state. Under BOT-toll, the contractors awarded works are supposed to invest the entire project cost and realise the same by collecting toll taxes for the next 30 years or so.

Under the annuity basis, although the construction company would invest the entire project cost, a fixed annual sum as annuity from the government would ensure that the former gets back its invested money.

In a related development, the ministry is contemplating to turn the 150-km stretch of NH-33 between Ranchi and Jamshedpur into a single package. Earlier, the stretch was divided into two packages — one between Ranchi and Rargaon and the other between Rargaon and Mohulia.

Arora added that the NHAI would soon invite expressions of interest for the Ranchi-Jamshedpur stretch, too.

The ministry was in favour of inviting the tenders on BOT-toll basis. The overall cost of the project would be around Rs 1,300-1,400 crore.

The proposed Hazaribagh-Ranchi four-lane road would end near Vikas Vidyalaya by taking a bypass of about 20km before meeting Ranchi-Jamshedpur highway near Rampur.

The state and central authorities are discussing whether the proposed Ring Road project for Ranchi can be merged with the highways’ proposed bypass on a cost-sharing basis. Arora added that the four-laning project of both the stretches would be part of National Highway Development Programme-Phase III.

Source: telegraphindia.com

National highway projects underway in the north eastern region

The Border Roads Organisation, National Highways Authority of India and state public works departments (PWDs) will execute national highway (NH) project works in the north-eastern states as per the lump sum amount allocated by the ministry.

Responding to a query in the Lok Sabha, minister of  state for  shipping, road transport and highways  K H  Muniyappa said, the national highway (NH) project works are underway in the north eastern region (NER) of India against lump sum amount allocated by the ministry. The Border Roads Organisation, National Highways Authority of India and state public works departments (PWDs) will execute the special projects in Sikkim and Tripura fully and in other states partly as per government allocations

The annual plan for the special programmes has not been finalised.

The state public works departments of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram and Nagaland are also engaged to execute NH works in these states on the basis of sanctions accorded by the ministry in successive annual plans.

The plan for the  development of the national highways in the 11th Five-year Plan has yet to be finalised by the government. The amount of works for development of national highways approved by the ministry during 2007-08 (1st year of 11th plan) and the amount of works included in the list of works prepared by the ministry for sanctions during 2008-09 for the six states to be executed by the state PWDs is:

(Rs in crore)

State	Amount of sanctions accorded during 2007-08	Amount of works listed for sanctions during 2008-09
Arunachal Pradesh	0.00	30.00
Assam	112.12	292.00
Manipu	37.97	99.00
Meghalaya	43.87	264.00
Mizoram	21.95	119.50
Nagaland	47.08	50.50

The expenditure incurred on the development of national highways in north-east region during 10th Plan was  Rs2,383.93 crore. In addition, the expenditure on development of national highways has also been incurred on special accelerated road development programme in north east (SARDP-NE). The expenditure under SARDP-NE during 2006-07 is Rs91.65 crore. The budget of 2008-09 is yet to be passed by the Parliament.

Four-lane Guwahati bypass was completed during the10th Plan. Karimganj,  Nagaon, Daboka, Lanka, Lumding, Maibang, Udharband, Mahour, Baihata and Agartala  bypasses are under construction and bypasses of Dibrugarh, Tinsukhiya, Makum, Dum Duma, Rupai, Digboi, Margreita, Ledo and North-Lakhimpur in Assam and Shillong, Jowai and Tura bypasses in Meghalaya and Dimapur and Kohima bypasses in Nagaland and Gangtok bypass in Sikkim are in Planning and Survey & Investigation stage.

Time frame for works of double laning, 4-laning and construction of bypasses approved during 2007-08 is given below:

The list of  works for double laning, four laning and bypasses approved under Annual Plan 2007-08

Assam: Widening of 8 km of existing intermediate lane of NH-37 from 563/0 to 571/0 to double lane by March 2010

Manipur: Widening to 4-lane from km 323.330 to 326.660 of NH-39 by March 2010

Meghalaya: Widening of single lane to two lane from km 21/870 – 43/00 0f NH-51 by March 2010

Nagaland: Widening to 2-lane with geometric improvement from km 17.00 to 23.00 of NH-61 by March 2010 and widening to 2-lane with geometric improvement from km 33.00 to 40.00 of NH-61 also by March 2010.

Source: domain-b.com

Road expansion along Singjamei side on NH-39

Road expansion along Singjamei side on NH-39 

Non-utilisation of funds curse continues to haunt

Imphal, April 17: The work on upgrading the National Highway-39 stretch from Moirangkhom to Singjamei Bazar to a four-lane has been stalled as the Ministry of Shipping, Road Transport and Highways, Government of India is hesitant on releasing the required fund in view of the failure to utilise the fund sanctioned earlier for various works.

The Ministry also seems to see no point or urgency in converting the road stretch to a four-lane in view of the existing traffic volume along the said National Highway.

Speaking to The Sangai Express an official source in the Works Department of the State Government, said that the Government of Manipur has spent Rs 11.45 crores till date in giving compensation to the owners of the land and buildings that were demolished for the purpose of expansion and upgradation of the road from Moirangkhom to Singjamei Bazar to a four-lane.

The source disclosed that for implementing the task of upgrading the road stretch to four-lane, the Works Department had submitted a DPR of Rs 6 crores to the Ministry of Shipping, Road Transport and Highways for carrying out the task from Singjamei Parking to MU Main Gate during 2006-07 besides another DPR of Rs 18.5 crores for the task from Ist MR Gate to Singjamei Parking.

The DPRs of the Works Department have been included in the work programme of the annual plan of the Ministry.

But inspite of several reminders, the Ministry has not sanctioned the required fund, thus putting the proposal of upgrading the road stretch to four-lane to a grinding halt, the source said.

Nonetheless, in the month of January this year, the Ministry gave its approval for sanctioning Rs 8 crores for taking up the work from Singjamei Parking to MU Main Gate.

Accordingly, the process for inviting tender is already underway, the source informed.

As for the road upgradation work from Ist MR Gate to Singjamei Parking, the required fund is yet to be sanctioned by the Ministry, the source said, adding that the State Public Works Department would be exerting pressure on the Ministry for sanctioning the fund.

In connection with the refusal of the Ministry to sanction the required fund for upgrading the road from Moirangkhom to MU Main Gate to four-lane, the source disclosed that the Ministry has conveyed verbally to the officials of the Works Dept that conversion of the NH stretch into four-lane is not necessary in consideration for the current traffic volume along the said route.

On top of this, the Ministry has also made it clear that the fund sanctioned earlier for development of the National Highway stretch from Maram to Moreh should be utilised properly first, the source disclosed.

Conceding that the fund sanctioned by the Ministry during 1996-1997 for construction/repairing of the bridges at Pallel and Lokchao has not been able to utilise till date, the source, however, claimed that most of the works that have been sanctioned by the Ministry during 2003-04 are nearing completion.

Source: e-pao.net

NATIONAL HIGHWAY PROJECTS IN THE NORTH EASTERN REGION

Execution of National Highway works in North Eastern Region (NER) is carried out by Border Roads Organisation, National Highways Authority of India and State Public Works Departments (PWDs). Border Roads Organisation is executing NH works in Sikkim and Tripura fully and in other States partly against lump sum amount allocated by the Ministry each year. National Highways Authority of India is executing the special programmes for which Annual Plan is not drawn. PWDs of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram and Nagaland are also engaged to execute NH works in these States on the basis of sanctions accorded by the Ministry in successive annual plans. Eleventh Plan for development of national highways is yet to be finalised by the Government. The amount of works for development of National Highways approved by the Ministry during 2007-08 (1st year of eleventh plan) and the amount of works included in the list of works prepared by Ministry for sanctions during 2008-09 in respect of the above-mentioned 6 States to be executed by 6 PWDs is given below:-

(Rs in crore)

State	Amount of sanctions accorded during 2007-08	Amount of works listed for sanctions during 2008-09
Assam	112.12	292.00
Manipur	37.97	99.00
Meghalaya	43.87	264.00
Mizoram	21.95	119.50
Nagaland	47.08	50.50

The expenditure incurred on development of National Highways in NER during 10th Plan is Rs 2383.93 crore. In addition expenditure on development of National Highways have also been incurred on Special Accelerated Road Development Programme in North East (SARDP-NE). The expenditure under SARDP-NE during 2006-07 is Rs 91.65 crore. The budget of 2008-09 is yet to be passed by the Parliament.

Four lane Guwahati bypass was completed during 10th Plan. Karimganj,  Nagaon, Daboka, Lanka, Lumding, Maibang, Udharband, Mahour, Baihata and Agartala  bypasses are under construction and bypasses of Dibrugarh, Tinsukhiya, Makum, Dum Duma, Rupai, Digboi, Margreita, Ledo and North-Lakhimpur in Assam and Shillong, Jowai and Tura bypasses in Meghalaya and Dimapur and Kohima bypasses in Nagaland and Gangtok bypass in Sikkim are in Planning and Survey & Investigation stage.

Timeframe for works of double laning, 4-laning and construction of bypasses approved during 2007-08 is given below:

List of  works for  double laning, four laning and bypasses approved under Annual Plan during 2007-08

 This information was given  by the Minister of  State for  Shipping, Road Transport and Highways, Shri K.H. Muniyappa in a written reply in the Lok  Sabha today.

Source: pib.nic.in

Cartelisation highway leads to Delhi

NEW DELHI: The National Highways Builders Federation, a body representing infrastructure companies, has filed a case in the high court against the ministries of finance and surface transport, and National Highways Authority of India (NHAI), stating the recently-announced selection process for infrastructure project bidders is promoting cartelisation within the industry. According to the federation, only bigger players such as GMR, GVK and Reliance Industrial Infrastructure will benefit from the new policies. Fearing cartelisation, smaller players, including Gammon India and Navyug, had lodged an official complaint with the federation. In December 2007, the government had announced a new selection process for infrastructure project bidders. According to the policy, only six bidders with the maximum experience would be eligible to participate in the financial bid stage. However, the policy does not specify the names of the six bidders. Earlier, NHAI had been developing infrastructure projects under another scheme in public-private partnership projects. So far, NHAI had issued a notice inviting tenders that was divided into two parts: technical bid and financial bid. In the technical bid stage, the credibility of the bidder was examined. Those eligible for this round could bid in the financial round. For this, the bidder would either give a grant to the government or give the minimum concession period — the shortest period under which it would return project to the government. “The policies are tilted towards the big players in the industry, whereby the top six companies will always be successful bidders with their kind of experience,” Hammurabi & Solomon senior partner Manoj Kumar told ET. Under the present policy, bidders that do not make it to the top six would automatically be pushed out of the race. “This is unfair and will lead to cartelisation,” sources said. Source: http://economictimes.indiatimes.com 

Highways rev into the fast track

Fasten your seat belt and get ready to zoom on Indian highways. The FM has increased the outlay for the National Highway Development Programme from Rs 10,867 crore in last Budget to Rs 12,966 crore this time. With the surface transport ministry just having finalised new model concessionaire agreements and other policies, it is set to put implementation in the higher gear. ”We have a big implementation plan for next fiscal that includes six or four laning of highways. The progress will be at a very fast pace now as the Budget gives NHDP a big push,” said Brahm Dutt, secretary, ministry of surface transport and roads. Among the ongoing projects that will get a push — finishing the 5,846-km golden quadrilateral linking Delhi-Mumbai-Chennai-Kolkata that’s already 96.48% complete and making progress on the 7,300-km north-south and east-west corridors that are 23.36% ready. The FM laid emphasis on Northeast and said the existing 180 km would go up to 300 km in 2008-09. Source: http://timesofindia.indiatimes.com 

Next Page »

NHAI's First ETC(Electronic Toll Collection) PLAZA

Latest Headlines

• Job Vacancies
• GMR consortium wins Hungund-Hospet highway project
• Sadbhav Engineering Secures Road Project in Karnataka from NHAI
• HCC arm bags 3 NHAI orders
• New ISO specification for ETC systems
• IVRCL Infra bullish on BOT road projects
• CCI approval for 561.89 km of highways in five states
• Backward-bending policy to take toll
• Knowledge Base: Tolling Operational Manager IQ Test
• Roadblock to four-laning as ryots reject Govt of

Copyright © 2007 Indian Tollways · Log in

Visitors: